HL Deb 23 October 1979 vol 402 cc31-47

4 p.m.

Debate resumed.

The PRINCIPAL DEPUTY CHAIRMAN of COMMITTEES (Lord Greenwood of Rossendale)

My Lords, I should like, if I may, in taking the House back to the report of the Select Committee, to thank my noble friend Lady White for the clear way in which she explained to your Lordships the contents of the report of the Select Committee, and also to say how much we look forward to hearing Lord Bellwin's reactions to the points which have been made in our short debate.

When the Directive and the Resolution swam into my ken earlier this year I expected that I should be able to spend a number of happy hours studying the very real problems of an industry in which for some time I have played some part. But as I got down to the Resolution and the Directive I realised that the significance of the report and the significance of the suggestions of the Commission were much more important than those which applied simply to the building industry, grave as those problems are. Today we are, therefore, touching on subjects of much greater importance.

It seems to me that unless a firm stand is taken by Her Majesty's Government this could be starting, as it were, a seeping process eroding the powers of the Council, and perhaps through that eroding the powers of the national Parliaments. I believe myself that the Council is of the very greatest importance because it is through the Council that the national Parliaments can make their views felt. If we start going behind the backs of the national Parliaments, then of course we are going to destroy the faith a lot of us have been trying to build up in the concept of a democratic European constitution.

Yesterday, in order to clear my mind on this problem, I tried to analyse what exactly is involved in the proposals that have come to us from Brussels. I think I can best put it like this: if the present proposal was adopted without amendment a series of Directives laying down common EEC standards for construction products could be adopted by a qualified majority vote without reference to the Council of Ministers, where our national ministerial representatives have a right of veto under the Luxembourg Convention.

The Directive would set up a special committee consisting of representatives of Member States to which draft implementing Directives could be referred. This was the committee to which my noble friend referred in her speech. Votes of the Member States would be weighted, and 41 votes out of 58 would be sufficient for a proposal to be adopted. Proposals not adopted by the committee will be referred to the Council of Ministers, which would also act by a qualified majority. If the Council did not act within three months, draft Directives would automatically be adopted. This procedure would not only eliminate the Member States' right of veto under Article 100, which we have discussed on other occasions, but also result in there being no publication of the Directives concerned while they were still in draft.

It is not surprising, if one accepts that analysis as a fair one—and that is what I have tried to make it—to find the Consumers' Association, in their excellent document of 2nd March, ending: In view of the great issues of principle and the serious flaws in detail, the whole Directive should go back to the drawing board". The Select Committee went very thoroughly into that possibility. I think if anything we may have tried too hard to make helpful suggestions which would facilitate the reaching of some agreement. But certainly the proposals in the report—and my noble friend Lady White deserves most of the credit for those proposals—are genuinely intended to make things a great deal easier for the Community.

I hope that the Government will be prepared to look at the matter with as critical eyes as we had in looking at it on the Select Committee, but will also be quite adamant in insisting that none of the rights of this Parliament, or this country, shall be in any way eroded. So, therefore, I endorse very much the speech which my noble friend made, and also the views of the Consumers' Association. I hope very much indeed that Her Majesty's Government, and their representatives, will take very seriously indeed a case which can be a precedent of the greatest importance, and I hope we shall not be allowed to drift into a situation wherein the rights of this House and another place can be impaired.

4.6 p.m.


My Lords, I should like to join in the thanks to my noble friend Lady White and to the Select Committee for the work that they have done on this particular Directive. I think that Parliament, the nation, and indeed the European Community ought to feel grateful for the vigilance with which they detected the important issue of principle and pursued the issue of principle beneath what, on the surface, is an extremely technical and complex Directive.

Perhaps I might preface my remarks by a general comment. What worries me about this Directive is that is shows a tendency on the part of the European Commission towards an excessive degree of zeal for an excessive degree of harmonisation in terms of daily life within the European Community. As your Lord ships know, I myself feel strongly about the importance of the European Community in world affairs, and the importance of British membership within the Community. But I think that the European Community ought to be principally about a limited number of big issues: of deploying the united economic power of the European Community in the great negotiations which go on in terms of world economic affairs; of creating a customs union; of using the influence and resources of the European Community in new forms of partnership with the Third World; of promoting an increased degree of monetary co-operation. These are things that the European Community ought to be about.

There is a danger of the European Community—and perhaps particularly of the European Commission within the Community—these days being tempted to get too bogged down in the details of everyday life, details that are best left to national Administrations. I do not think that the European Community, about which I remain enthusiastic and indeed passionate, ought to spend too much of its time and resources on the approximation of laws with regard to the components for waste evacuation installations. The report mentions the recent draft Directive on lawnmower noise, to which the Select Committee has given some attention. I used to be the Commissioner for Regional Affairs in the European Community and I saw a good deal of the Community from one end to another. I would rather see the Community engaging its activities on things other than lawnmower noise.

I noticed in Greenland, when I was there, that no igloo was complete without its motor lawnmower! In Sicily the problem was far more to get enough water to make the grass grow than to cut it. I am told by my old colleagues, that the wits around the European Commission—I do not know whether it is true or not—say that in its original form the draft Directive on lawnmower noise sought to lay down an approximation of the hours when we should all use our motor lawnmowers, and that this arose because some earnest Commission official was much disturbed early on a Sunday morning by his neighbour's habits with his motor lawnmower! More seriously, repeat that I think there is a danger of the Commission getting too much into the details of daily life. I was much reassured by what the President of the Commission, Roy Jenkins, told the British CBI the other day. He said that he was seeking to get the Commission away from any sort of notion that if it moves, harmonise it.

I am conscious in making these general remarks that of course there is a problem about the interaction of the great issues on the less great issues, and the problem in this particular case, to which my noble friend Lady White drew attention in her characteristically reasoned manner, is that if you seek, as I would, a customs union, you cannot have a true customs union if there are various non-tariff barriers to trade, including technical non-tariff barriers to trade. Therefore, in my view there is a strong case for removing non-tariff barriers to trade. However, one should be prudent and thoughtful about the best tactics in approaching this. I recognise perhaps more than most in this House the frustrations of Commission officials with endless delays in the Council of Ministers and elsewhere in regard to their various ideas, but I do not think the way proposed in this Directive is the best way to overcome those frustrations, and I would lay down three guidelines.

First, I believe there is an obligation on the Commission in regard to any Directive removing non-tariff barriers to trade to prove the need to remove them—to provide the evidence and show that there is a strong case. I notice in the evidence given to your Lordships' Select Committee that grave doubt was cast as to whether that need had been proven, and indeed the Consumers' Association said in terms that no evidence had been produced as to the extent of the present restrictions.

I must declare a certain interest, in that I am chairman of a body called the Advertising Standards Authority, which is much involved in the draft Directive on Misleading and Unfair Advertising on which your Lordships' House has produced an excellent Select Committee report and a debate. In regard to that draft Directive, over many years it has been asserted by the Commission that the justification for the Directive was that differing laws and arrangements in regard to the control of advertising standards was a distortion of competition. But I think I am right in saying that over all these years that has remained an assertion which has never been backed up by evidence. It is in my view very necessary that if a case for harmonisation is to be made, it should be thoroughly backed up by evidence.

Secondly, when a case is found to be made, there is the choice between optional harmonisation and total harmonisation. As often as possible the Commission should go for optional harmonisation; that is, for enabling those undertakings which wish to be in the field of the total Community market to adopt the regulations, and for those who wish to remain idiosyncratically within their own national market to do so. The noble Baroness conceded that the Commission had said it was its desire to do that, and that is certainly the general thrust of Commission policy. Nevertheless, with regard to this particular Directive, although the Commission says in its paper that as a general rule the Commission is in favour of resorting to the optional method of harmonisation in the implementing of Directives, this general rule of course does not exclude the possibility of using the total harmonisation method should this prove to be essential in the case of certain specific problems or in regard to the use of certain products.

Therefore, what we face in connection with the present proposed Directive is that there could be propositions for total harmonisation that would go through the Commission procedure proposed without any reference to the Council of Ministers. Accordingly, my third piece of advice to my former colleagues in the European Commission is that they really should not seek to deal with their frustrations over delays in the Council of Ministers by in effect short-circuiting the Council of Ministers. I thought the Consumers' Association evidence on this was very pungent and to the point. They said in their evidence to your Lordships' Select Committee: We think the European Community is on a most dangerous road. We understand the desire to remove barriers to trade, but this must not be done by giving the bureaucracy the right to impose statutory requirements. I strongly endorse that, and I endorse it out of my own experience of four years as a member of the European Com- mission. I believe the European Commission is an essential institution of the Community. In my view, unless there was a purely European body to take the kind of initiatives that the Commission has taken on European monetary reform recently, the Community would move much more sluggishly than it does.

I also not only believe, but know, that the Commission enjoys the loyalties of a very devoted group of public servants with a high degree of expertise. But I say seriously—and I was conscious of this in the days when I was in Brussels—that the Commission must always be very cautious about its degree of democratic legitimacy within the European Community. Commissioners are appointed for four years and are sacrosanct during that term. The officials of the Commission are quite properly there in permanent post. They have no mandate arising from an election in the way national Governments and Parliaments have, and therefore they should be very cautious about the degree to which they seek to cut out the democratic processes.

Apart from that, it must be faced that the European Commission is not the best organised body in the world; it is in fact a rather small, though devoted, body of people. The noble Lord, Lord Hinton of Bankside, produced impressive figures about the numbers of people involved in seeking standardisation in building and construction in this country; they amount to almost the total number of officials engaged in the work of the European Commission as a whole, outside the translating and interpreting field. It is recognised that the internal structure of the Commission could do with improvement. In fact, the present Commission set up an independent review body for this purpose which has just reported, and some of your Lordships may have seen the report. It confirms what has long been my view of one of the Commission's weaknesses; namely, that it is excessively vertical in its organisation. They said in the report: The lack of adequate co-ordination among members of the Commission and a certain lack of encouragement from them for central coordination and planning among senior officials is particularly evident. The result has been a lack of structural co-ordination amongst Directors-General and a growing emphasis on the roles of the personal staffs of the Commission. That independent review committee went on to emphasise the need for: strong co-ordination procedures and proper machinery for arbitrating between the claims of competing sectors … Co-ordination within the Commission itself is at present insufficient. It cannot be replaced by co-ordination at administrative level, which is then too often informality and takes place at too late a stage in the decision-making process". My experience was that an official in the Commission is able to advance a particular proposal, often in a highly complex and technical field, to a degree of development that would be quite impossible for an official in our national Administration, who would have to consult other departments with an interest in the matter. Then, when the decision finally surfaces, it goes through via a written procedure which means that the members of the Commission who carry the ultimate responsibility very rarely have any opportunity to see or express a view on the merits of those proposals.

It is for these reasons I believe from my experience inside the Commission that the proposals in this particular Directive for decisions being taken by a qualified majority within the Commission, with the Commission in the chair and without any previous publication of the papers, is, as the Consumers' Association said, a thoroughly dangerous proposal. I therefore very much endorse the proposals put by the Select Committee of your Lordships' House in its paragraph 33; that is a reasonable compromise and an effort to be helpful in these matters. It is that where there are proposals for total harmonisation they should certainly go to the Council of Ministers under Article 100; that where there is a proposal for optional harmonisation there should be within the Commisssion procedure an adequate period—your Lordships' Committee proposes three months—during which the proposals should be given adequate publicity; and that, finally, any decision on these proposals within the committee that the Commission chairs should in fact be taken on a unanimity basis. I believe that these are sensible and democratic proposals.

My Lords, I conclude by going back to my initial general remarks. I believe that once again your Lordships' Select Committee has made robust, but realistic, proposals about how best to react to suggestions coming out of the European Commission. I hope that the report that we have before us will be accepted by Her Majesty's Government. I hope, equally importantly, that it will be accepted by the European Commission in the spirit in which I know it is offered. I hope that, as the Community develops, the European Commission will be highly selective in the proposals that it puts forward for harmonisation. In particular, I hope that in the field of consumer protection, for example, it will recognise—perhaps this is true equally of harmonisation of building regulations and such matters—that it has a very important role to play in terms of exchange of information about the best practice in the various member countries of the community; but it should be very cautious about seeking to impose a uniformity on the practices in the various member countries. Finally, I hope that, liberated from some of the less important issues, the Commission and the European Community will be able to concentrate and to make really great progress on the great issues on which so much depends in the future.

4.22 p.m.

The Earl of SHANNON

My Lords, as previous speakers have mentioned, I know that the whole House agrees with the valuable work of our European Communities Committee and its sub-committees. Sub-Committee G has rightly drawn the attention of your Lordships to the proposal we are now considering for a variety of reasons, some of which appear to be of great constitutional importance, but for my part I wish to make only a very brief intervention, on one particular aspect of the proposal, which I see was, quite rightly, noticed and questioned during the proceedings of the sub-committee by the noble Lord, Lord Ironside. I refer of course to the proposed criteria in Annex VI covering requirements for bodies who carry out independent testing in the absence of the self-certification procedure.

For your Lordships' convenience I should like to paraphrase Annex VI. Clause 1 basically requires the body to be competent. Clause 2 then seeks to debar almost all those bodies who have special competence in this field. I agree that there is a small mollifying sentence on exchange of technical information, but this does not really much affect the disqualifying power of the clause. I appreciate that various amendments have been suggested to make the clause more workable, especially that, I believe, put forward by the European Parliament, but this still leaves the clause with what could be serious deficiencies, especially in regard to definition.

It would be most desirable to remove Clause 2 altogether, but that would of course raise the objection that the testing body must be seen to be impartial, and this is highly laudable from a consumer point of view. But the real difficulty of Clause 2 lies in two words, "design" and "maintenance". Any laboratory which has in any way ever contributed by research or development to the sum of total knowledge in this field can be disallowed as having taken part, however indirectly, in the forbidden activities. Above all, in view of the European Parliament's suggested amendment, where does technical advice and consultation stop?

Those very bodies whose work has enabled them to be eminently qualified under Clause I are therefore automatically excluded under Clause 2. This, strictly interpreted, excludes contract research laboratories, research associations, and even universities, if they have ever made a contribution in this field by contract work, co-operative work, or, I suggest, even a thesis, especially if the author is now on the university staff.

This particular subject received considerable attention at the meeting last week in Brussels of the Federation of European Industrial Co-operative Research Organisations, of which I am the Secretary. That organisation strongly supported the amendment which was proposed in this country by the National Council of Building Material Producers, which would allow the traditionally accepted research bodies in this field to be accredited, although one understands that they would prefer to see deleted the words, "design", and "maintenance", as well. I confirm that the Council of the European Federation would also like to see those words deleted. We must be careful that this proposal receives careful attention and consideration for many reasons in addition to that to which I have particularly referred, because once enacted it can, and in all probability will, be used as a pattern for future harmonisation proposals in many other industries.

The European Community looks to new technology to maintain its economy in the face of the pressure from the developing world. Those institutes, research organisations, and seats of learning who contribute to new designs and maintain products—not only keeping them working but maintaining them technologically in advance so that they can secure a market—are already in many cases the accepted bodies to test impartially often with tests which they themselves have invented. We must not allow this apparently small clause to be accepted as it stands, however well-intentioned it appears to be at first glance.

4.28 p.m.


My Lords, I welcome the opportunity to respond to the points raised by noble Lords in this debate. I should also like to congratulate the Select Committee on producing such a clear and—if I dare say it—such a constructive report. I am sure that the Select Committee has made a most important contribution to the debate on a most difficult subject. We could not have had a better illustration of the value and importance of the parliamentary scrutiny process, which is highly relevant to this particular Directive. I can assure the House, without hesitation, that both the report and the debate have been an invaluable guide to the Government in dealing with the Directive. I am sure that the debate to be arranged in another place shortly will be equally instructive.

As the noble Baroness, Lady White, said, construction plays a major part in the economies of each of the Member States of the Community. The scope of the draft Directive covers an extremely wide range of products. It therefore has, potentially, widespread implications for United Kingdom trade and industry. Moreover, if the procedure proposed for implementing Directives were agreed, it would undoubtedly be repeated in framework Directives for other industries. The implications of the draft Directive in its current form therefore go much wider than the construction industry alone and, as noble Lords have said, we must examine it with particular care.

The Select Committee and the industry have questioned the need for the Directive. In its report last year on Directives under Article 100 (of which this is one), the Select Committee said: The Commission should when preparing a draft proposal demonstrate that divergences between national laws are affecting the functioning of the Market, and affecting it directly and to a substantial degree.". I am sure that that is right. In this report the committee say—and again I quote—that they, agree with the Economic and Social Committee that the existence of major barriers should be established before implementing directives are brought forward". The report goes on to say that the committee, are not satisfied that the need for the present proposal has been demonstrated". This view has been strongly supported by United Kingdom industry and those noble Lords who have spoken today, and I think it is fair comment. The preamble to the draft Directive makes a series of assertions but quotes no examples. There is no quantification.

The object of the Directive is the removal of non-tariff barriers to trade—an object which I am sure the whole House would endorse. It is no good having a common market without tariffs if Government regulations still prevent, or at any rate inhibit, trade. The question is: How far does this in fact happen? The United Kingdom delegation pressed this question at the opening meeting of the Council Working Group on this Directive in Brussels last month. Several other delegations were also concerned. The Commission accepted that the present priority list in the draft resolution was open to negotiation; it was only a first assessment based on limited information. The list will be reviewed, and we are in touch with United Kingdom industry to ensure that we reflect its precise, up-to-date views in the discussions. There is no doubt that the present list is too long, and we must ensure that as far as possible it includes the items desirable for British industry.

But, while we have reservations on the number of implementing Directives we may need, I am sure there will he some. For example, drafts on glass and fire-testing are already in an advanced stage of drafting. Others may be needed to deal with barriers between other Member States affecting products which the United Kingdom does not export. We must accept that. I do not think it is realistic, as some have suggested, to oppose the framework Directive itself as a matter of principle. It is no help to attack the EEC as a matter of course at every opportunity. We must work within the EEC machinery to achieve the results we want. That does not mean unquestioning acceptance of the procedures put forward under the present draft Directive, and I shall come to those shortly. Moreover, we shall certainly need to be convinced of the need for each implementing Directive as it comes forward; and I am sure the Select Committee have proposed the right approach.

Noble Lords this afternoon and in committee—and industry in our consultations—have raised numerous points on the technical content of the Directive. For example, what criteria will govern the choice between optional and total harmonisation? I agree with the noble Lord, Lord Thomson of Monifieth, that harmonisation should normally be optional; but are the safeguards adequate, particularly in relation to self-certification and imports from third countries? Do the criteria for approval bodies fit United Kingdom circumstances—for example, in relation to research associations?

I cannot answer all these points today. We have already given notice in Brussels that we shall wish to raise these and other points in the detailed discussion of the draft, article by article, which will start in the Council Working Group on Thursday. I can assure the House that I will study the report of this debate very carefully and ensure that these points are taken into account by my officials in the negotiations.

However, I should like to touch briefly on what the noble Lord, Lord Hinton of Bankside, has said about the problems of international standardisation. No one has more experience in this field than the noble Lord, and I do not for a moment wish to suggest that he is in any way exaggerating the difficulties which face the standards-making organisations in reaching agreement on precise standards. It is true, too, that nothing in the present proposals will solve that problem. But I think there will usually be a fair measure of agreement on the areas which ought to be covered in a standard—for example, for a door, its stability and its resistance to impact and fire; for glass, its strength and clarity—and, as I said before, we can surely agree with the intention of ensuring that, once we have an agreed standard, it is applied to break down barriers to trade. That is what the proposal before us is all about.

My Lords, it has its problems. The main comments in industry's representations in the Select Committee's report and in this debate have, of course—and quite rightly—concentrated on the procedure proposed by the Commission for the adoption of implementing Directives. The primary aim of the proposed procedure is greater speed, so that once the standards exist there is no unnecessary delay. The Community's programme of Article 100 Directives is well behind target. The noble Baroness has argued that that does not in itself matter, but, clearly, where there are barriers to trade we should remove them as quickly as possible. A second aim, I assume, is to reduce the load on Ministers.

However, I am not at all sure that the cure is not worse than the disease. Indeed, would it even cure the disease? The Commission propose that responsibility should be delegated to a Committee of Implementing Directives, operating with a qualified majority vote. Ministers will be involved only if the Commission's proposal fails to receive 41 votes in favour out of 58, or if the committee fails to take a decision within the timetable determined by the Commission. In these cases Ministers will still be involved, and time may well not be gained. The procedure will also make little difference to implementing Directives which are unanimously supported: these should be processed quickly anyway, without placing an undue burden on Ministers. The procedure can therefore achieve the twin aims of speeding up and of reducing the load on Ministers only in those cases where there is a qualified majority but not unanimous support. Surely there will be few of these.

This limited potential gain must be weighed against the various objections that the noble Baroness and noble Lords have mentioned today. A Member country could be required to accept products to a standard it regarded as undesirable, possibly to a lower standard than it applies at present. If the Directive required total harmonisation, this would become the only acceptable standard. This could have implications for health and safety. It could certainly affect our international trade and adversely affect United Kingdom industry by introducing competition from imports currently regarded as unacceptable. It is not clear how far the procedure will provide for proper consultation with the industry. The noble Baroness has stressed the vital importance of consultation in the widest sense, and I entirely agree. However, I was glad to hear that the Commission have recognised the need for this, and have put forward amendments to provide for it. We shall be looking at these very carefully to see how far they go towards what we would regard as acceptable.

Finally, and most importantly, the procedure would remove ministerial and parliamentary control over what is essentially a legislative process. It is hard to see where or how parliamentary scrutiny could be fitted in; and the Council of Ministers would be removed from the picture if a proposal secured a qualified majority in the committee. We and several other Member States therefore expressed strong reservations on this proposal at the first meeting of the Council Working Party in Brussels last month. We are now waiting to see how the views of other Member States develop, and whether any alternative proposals emerge for speeding up the implementing procedures.

The Select Committee have put forward their own alternative—I hesitate to call it a compromise. I think they are right to distinguish between the two main features of what the Commission are proposing: unanimity and the principle of delegation to the Commission. These are two separate issues. I am sure your Lordships' House will agree that we must maintain the unanimity principle. Qualified majority voting has already been accepted in relation to adaptation of existing Directives to match technical progress. In such cases policy is not at stake, but to apply majority voting to the range of decisions involved here—for example, whether there should be an implementing Directive on a particular product, whether harmonisation should be total or optional, the standard to be adopted, the nature of the approval procedure, and so on— would be quite another matter. These are matters of policy, not technicalities.

There may, however, be scope for speeding up the procedure and reducing the load on Ministers while retaining the unanimity rule. The Select Committee suggest drawing the line between optional and total harmonisation and allowing only the former to proceed by the committee methods. But I am not sure this would be right. To remove the right of appeal to Ministers—and perhaps also the scope for parliamentary scrutiny—even in relation to optional Directives could create pressures which might make it difficult for the United Kingdom to resist developments which could have adverse effects on British industry or existing levels of safety, for example, by requiring us to accept products of a lower standard than we require at present.

My Lords, I think we must therefore maintain our opposition to the procedure proposed by the Commission. We would, of course, be ready to consider any alternative proposals that might be put forward which would achieve the objective of greater speed in areas where the case for harmonisation was established but would not concede any of the vital points to which I have just referred. I am most grateful for the contribution made by the committee, by the noble Baroness and by noble Lords. It has been a most helpful debate.

4.42 p.m.

Baroness WHITE

My Lords, I should like to thank warmly all noble Lords who have taken part in this debate. The Minister's speech was very encouraging and I am sure that we are all grateful to him for it; he went further than I thought he might. But these are serious matters and I was particularly grateful to my noble friend Lord Thomson of Monifieth because he widened the debate by asking, I think, the most important question of all. Are these very detailed matters what the Community was really created for? I think that that is the nub of the matter. If we could get that straight, then I think there would be less occasion for differences of views between some of us and our very warm friends in Brussels. On a personal basis we have the warmest regard for all of them, but we find ourselves frequently in the difficult position of appearing to disagree and having to pursue our principles with firmness.

My Lords, with these expressions of gratitude and the feeling that the work of our committee, onerous as it sometimes is, is at least appreciated in certain quarters of your Lordships' House, I beg to move.

On Question, Motion agreed to.